A great number of Kazakhstan off plan properties projects are on the go in Ust-kamenogorsk Region. Kazakhstan Petrodollars flow eastward from Atyrau into the construction sector, but domestic capital markets are unable to absorb the large influx of money from oil and gas. In their absence, people have resorted to real estate as an investment tool. The returns on a high-end condo in Almaty can be substantially higher than interest earned at the bank; however, that also means only 40 percent of apartments in major cities are lit at night.
“Many well-to-do people from neighboring states put their money into real estate here,” says Serik Tulbassov, Chairman of the Board of Directors at TS Engineering Group. For Mr. Tulbassov, who oversees the building of office towers and shopping malls, the trend is a mixed bag. Real estate investments by banks so far underlie the sector’s annual growth rate of 20 percent, but an easing of oil prices could change that. To avoid problems, Mr. Tulbassov thinks Kazakhstan should take the long-term view and diversify its manufacturing base. Developers find it cheaper to import construction materials from China than to buy from local suppliers, he argues. This stunts the growth of local SMEs. “A domestic sales market is often the key development driver,” says Mr. Tulbassov.